Lucent nets $338m profit

THE largest US telephone-equipment maker, Lucent Technologies Inc, had first-quarter net income of $338 million as sales rose for the first time in more than three years on demand for wireless-network gear.

Net income was 7 cents a share, compared with a loss of $264m, or 11 cents, in the year-earlier quarter ended December 31, Lucent said in a statement.

Sales rose 8.9% to $2.26 billion, the first year-over-year increase since September 2000.

Lucent is benefiting from stronger demand for high-speed wireless equipment from customers such as Verizon Wireless. The company had $28.7bn of losses in the past three years. Lucent said it expects a profit this fiscal year, excluding certain costs.

“You’re looking at a company that seems to be solidly back in the profits,” said Lehman Bros analyst Steven Levy, who rates Lucent shares “overweight /positive” and doesn’t own them.

Shares of Murray Hill, New Jersey-based Lucent, the second biggest gainer this year in the S&P 500 Index, slipped 17 cents to $4.58 at 9:35am in New York Stock Exchange composite trading, down from a high of $64.69 in late 1999.

Lucent reported net income for the second straight quarter after 13 quarters of losses.

Excluding items, first -quarter profit of 3 cents a share beat analyst forecasts for a loss of 1 cent, based on a Thomson Financial survey. Lucent said it had a net favourable impact of 4 cents a share from items including a tax benefit, an investment gain and costs related to restructuring and warrants to be issued as part of a lawsuit settlement.

“We are seeing evidence that the market is stabilising,” chief executive officer Patricia Russo said in the statement.

“We’re not just seeing the tide for overall equipment spending rising with any significance,” Ms Russo said on a conference call with analysts.

“We’re seeing customers’ willingness to invest in areas such as equipment for internet-based calling.”

First-quarter revenue beat forecasts of $2.14bn and rose from $2.08bn in the year-earlier quarter.

Revenue in fiscal 2004 will be little changed or will “increase slightly” from $8.47bn in 2003, Chief Financial Officer Frank D’Amelio said.